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Horizontal agreements. Julija Jerneva. Horizontal agreements. Was Adam Smith right?. “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in conspiracy against the public, or in some contrivance to raise prices.”. Points of interest.

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Horizontal agreements

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Object cases

Effects cases

Negative effects on competition within the relevant market are likely to occur when:

the parties individually or jointly have or obtain some degree of market power and

the agreement contributes to the creation, maintenance or strengthening of that market power or allows the parties to exploit such market power.

Horizontal Arrangements

Article 101(3)

Commission Guidelines

R & D Block Exemption Regulation (Reg 1217/2010)

Specialisation Block Exemption Regulation (Reg. 1218/2010)

Price Fixing

An agreement amongst ‘competitors’ to raise, fix or otherwise maintain the price at which goods or services are sold

Can occur directly or indirectly

Prohibition applies to both purchase and selling prices

Frequently includes a policing mechanism

Price fixing

Wholesales/retail price

Commission fees

Discount levels

Nintendo

In the time from 1991 until 1998, Japanese producer of videogames Nintendo and sevenits official distributors in Europe cooperated to preserve artificially large price differences in Europe.

parallel sales, imports and exports controlled.

The merchants which allowed parallel export were punished by providing smaller deliveries or boycotting them.

United Kingdom prices were 65% lower than in Germany and the Netherlands.

Vitamin Cartel

In 2001, the European Commission inflicted a money fine to companies (among them also Hoffman-La Roche) for participation in cartels, which were made with a purpose to decrease the competition in vitamin industry.

Duration:10 years

Violation: fixing prices

The banks’ case in Latvia

Total fine: LVL 5 495 462,19

22 banks

MIF –„Multilateral Interchange Fee” (commission for the transactions in the POS terminals and internet